Dick v. Supreme Body of the International Congress , 138 Mich. 372 ( 1904 )

Carpenter, J.

Plaintiff’s husband, John A. Dick, •died July 10, 1901. At that time he was a member of defendant order, and, as such, his life was insured for the sum of $1,000. Plaintiff was his beneficiary, and she brought this suit to recover said insurance. She obtained, a verdict and judgment in the court below.

Defendant contends that a verdict should have been directed in its favor, because this controversy had been determined in its favor by the tribunals of its order, and that such determination was final. The question raised by this claim is the only one we are called upon to consider. The facts essential to an understanding of this, question are these:

The by-laws of defendant provide that the supreme> board of trustees—

“ Shall pass on all death claims. * * * If, in its. judgment, any such claim is not a valid one, they shall notify * * * the beneficiary, * * * and fix the time * * * when the claimants or their attorneys may appear before the supreme board of trustees * * * and present such evidence, either orally or by affidavit, as they may have to establish the justness of said claim, and the said supreme board of trustees shall try, hear, and decide upon the justness and the validity of such claims, and their decisions shall be binding * * * unless an appeal is taken to the supreme body. * * * It, the supreme body, shall have the power when an appeal is made * * * to decide as to the validity of all death claims, * * * and its decisions shall be final and binding upon every member and his beneficiaries. No suit at law or equity shall be commenced or maintained by any member or beneficiary against the supreme body.”

Defendant’s board of trustees, suspecting that decedent had obtained his insurance by making false statements respecting his condition of health, notified plaintiff that, in their judgment, her claim was not valid. A hearing was had before them, and the claim rejected. On this hearing plaintiff presented several affidavits tending to prove the validity of her claim. The only other testimony was the statement of defendant’s general manager. This witness narrated a conversation between himself and decedent’s physician in which the latter said that deceased came to him in January, 1900, and stated that he became sick in February, 1899, and had lost 50 pounds in this interval. This statement, which tended to prove that the insurance had been obtained by false statements, was objected to as incompetent, hearsay, and privileged, but it was nevertheless received and acted upon. From this decision rejecting her claim plaintiff appealed to the defendant body. Neither she nor her counsel was present when her case was there considered. They were told it was not necessary for them to be present, and led to believe that the case would be heard on substantially the same testimony as that introduced before the board of trustees. And it was so heard. The affidavits of plaintiff were laid before the appellate tribunal, but, instead of the hearsay statement of the physician, his affidavit stating substantially the same facts was introduced. That tribunal rejected plaintiff’s claim.

Can we say, as a matter of law, that this determination was binding upon plaintiff ? If we can, the judgment of the lower court should be reversed. If we cannot, it should be affirmed.

Defendant not only used the physician’s affidavit as testimony, but, it is to be inferred, based its decision solely upon such affidavit. Section 10181, 3 Comp. Laws, prohibits the use of such testimony on the ground that it violates a sacred confidential relation. If plaintiff had a right to invoke this law, it cannot be said that she waived that right. Through her counsel she objected to this testimony in the lower tribunal, and defendant’s officers had no right to assume that she withdrew this objection in the appellate tribunal. It may therefore be inferred that defendant willfully introduced the testimony under consideration, and upon such testimony rendered a decision adverse to plaintiff. From this conduct, can any inference unfavorable to the validity of the adjudication pronounced by defendant be drawn ?

It is clear that the validity of adjudications of this character is not lessened by the circumstance that technical rules for the admission of evidence are disregarded'. See Derry v. Great Hive L. O. T. M. M., 135 Mich. 494, Barker v. Great Hive L. O. T. M. M,., 135 Mich. 499. It is likewise true that within the limits of common fairness such tribunals may prescribe their own rules of evidence. Derry v. Great Hive L. O. T. M. M., Barker v. Great Hive L. O. T. M. M., supra. And I think it is also true that no error of such tribunals in admitting testimony will' be considered by a court unless such error affected its decision. But it must not be supposed that such tribunals are above the lawmaking power of the State. They have no right to violate any law which that power prescribes for their guidance. And if such violation results in their depriving a claimant of the hearing to which he is lawfully entitled, their adjudications are of no legal effect. See Rose v. Supreme Court, Order of Patricians, 136 Mich. 577.

Did defendant violate a law which was prescribed for its guidance when it admitted in evidence the affidavit in question ? The legislature has said:

“No person duly authorized to practice physic or surgery shall be allowed to disclose any information which he may have acquired in attending any patient.” Section 10181, 3 Comp. Laws.

If this statute applied to its proceedings, defendant flagrantly violated it. Did it apply ? The proceedings were in their nature judicial, and there can be no doubt that the legislature had power to prescribe rules which it was defendant’s duty to observe. Did the statute prescribe such a rule ? “ The statute is one passed for the sole purpose of enabling persons to secure medical aid without betrayal of confidence.” See Grand Rapids, etc., R. Co. v. Martin, 41 Mich. 671. Did the legislature, in passing this statute, which prescribes a rule of evidence to be observed in judicial proceedings, intend to permit this con' fidence to be betrayed in any judicial proceedings which it. had the power to regulate ? To impute any such intention to the legislature is to assume that it designed to defeat its manifest purpose. There is nothing in the statute to limit its operation to any particular judicial tribunal or to any particular class of judicial proceedings. We must therefore assume that it was intended to extend to all proceedings of a judicial character which the legislature had the power to regulate. This statute was, therefore, in my judgment, violated when the physician’s affidavit was used as testimony. See Fennimore v. Childs, 6 N. J. Law, 386; Gallagher v. Kern, 31 Mich. 138.

Did this violation of the statute deprive plaintiff of the hearing to which she was lawfully entitled ? Plaintiff was entitled to the hearing prescribed by defendant’s by-laws. The construction which defendant itself placed on these by-laws—and, in my judgment, their proper and necessary construction—required it to dispose of controversies upon testimony of some character produced before it at a time and a place where plaintiff had an opportunity of being heard. We have held, in accordance with fundamental constitutional principles, that an adjudication made by such tribunal is not binding upon a party who is denied the opportunity of being heard. See Rose v. Supreme Court, Order of Patricians, supra.

The most obvious and essential rights secured to claimant by the opportunity of being heard are these: The right to present testimony, and the right to hear and meet testimony presented against her. If her claim was rejected upon testimony obtained when she was not present, and of which she knew nothing, we should not hesitate to say that she was denied the opportunity of being heard, even though permitted to introduce testimony tending to support her claim. In such a case it would be clear that, though given a hearing in form, claimant was deprived of all advantage of such hearing, and was therefore denied the hearing to which she was lawfully entitled.

Is it not equally clear that when defendant rejected plaintiff’s claim because of testimony admitted against objection, and which the law in positive terms forbade it to consider, that there was a denial of the hearing to which plaintiff was lawfully entitled ? I think it is. Plaintiff was deprived of all the advantages of introducing testimony when that testimony was disregarded by defendant and her case decided upon testimony which it had no lawful right to consider. It was defendant’s duty to observe the law prohibiting the use of this testimony. It was plaintiff’s right to have that law observed. This right and this duty were just as clear and obvious as if they had been expressly stated in the by-law which provided for the hearing of plaintiff’s claim. If such by-law had in express terms provided that this law excluding the physician’s affidavit should be observed, no one would for a moment maintain that a determination by defendant in violation of such provision was binding upon plaintiff. Defendant could not insist that such determination complied with the contract which it violated. The only distinction between the supposed case and the actual one is this: In the supposed case the provision for the observance of the law is expressed; in the actual case, that provision is necessarily implied. This distinction affords no ground for the application of a different legal principle. I think, therefore, that plaintiff was denied the hearing to which she was entitled, and was therefore not bound by defendant’s adjudication.

I think it may also be said that the statute in question not only forbade the use of the physician’s affidavit as testimony, but by necessary implication forbade all judicial tribunals (including the judicial tribunal of defendant) from determining controversies (at least without the consent of parties) upon such testimony. And the law will not permit defendant to retain the unlawful advantage obtained by violating its prohibitions.

If defendant’s tribunal had been a court of law, its determination could have been successfully assailed. It is true it could have been assailed in only one way: That is, by review before an appellate constitutional tribunal. Defendant’s adjudication cannot be so reviewed, and it must, therefore, be open to some other kind of an attack, or such tribunals have an authority not possessed by courts established by the Constitution.

It is contended by defendant that the conclusiveness of its adjudication may be assailed only in a court of chancery. But I think it is settled by our decisions that it can be assailed, when it is asserted as a defense, in a proceed^ ing at law. See Rose v. Supreme Court, Order of Patricians, supra; Lamson v. City of Marshall, 133 Mich. 250.

To uphold the binding effect of the adjudication made by defendant, we must declare either that the legislature intended to except the judicial proceedings of defendant from the operation of a law which, according to its obvious and natural construction, applies to all judicial proceedings, or we must declare that the defendant has the right, which no other person or body of persons in this State has, to violate at will a constitutional legislative enactment. I think that neither of these alternatives can be accepted, and that the judgment of the court below should therefore be affirmed, with costs.

Moore, C. J., and Montgomery, J., concurred with Carpenter, J.